Wipro posts strong revenue and profit growth

Indian outsourcer Wipro reported a 29% rise in revenue for its fiscal year ended March 31.

Revenue for the year totalled 254.56 billion Indian rupees ($4.92 billion as of the last day of the period reported), while profit rose 7% to 34.42 billion rupees, the company said Wednesday.

IT services revenue accounted for around 75% of Wipro's revenue for the year, or 191.19 billion rupees, up by 31% over the previous year.

A separate IT products business recorded revenue of 33.42 billion rupees, up by 36% over last year. This business accounts for 13% of Wipro's total revenue. The company also has consumer care and lighting businesses.

In U.S. dollars, IT services revenue growth for the year was lower, at 18.5%, because of the appreciation of the dollar against the rupee. In the fourth quarter, IT services revenue in U.S. dollars grew 1.4% year on year.

The published results are based on U.S. generally accepted accounting principles (GAAP).

Indian IT services companies are benefiting from the depreciation of the Indian rupee against the U.S. dollar. The U.S. accounts for over 50% of the revenue of many Indian outsourcers.

The currency depreciation translates into higher rupee revenue for Indian outsourcers, most of whom have more than 60% of their expenses in rupees, Forrester senior analyst Sudin Apte said last week. Higher revenue has helped vendors improve operating margins by over 10%, he added.

Wipro's IT services business had 97,810 employees as of March 31, 74,986 of them in IT services and the rest in business process outsourcing (BPO).

The company has however reduced new staff additions. In the fourth quarter it added 845 staff, compared to 2,290 new staff in the same quarter a year ago. A number of Indian outsourcers are reducing new hires, and introducing pay cuts, as the economic downturn is affecting the outsourcing business.

Wipro's IT services business added 110 new clients during the year.

The IDG News Service is a Network World affiliate.